The invention relates to a method for issuing and managing debit gift cards.
Consumer purchases of gift cards have increased dramatically in recent years. Gift cards allow the purchaser (“giftor”) a quick and easy way to select a gift without the difficulty of determining exactly what gift the recipient (“giftee”) would enjoy. Gift card recipients often like the flexibility of a gift card where the recipient can choose what particular good or service to purchase. A gift card is small and lightweight and can be sent easily through the mail. It can also have added security features such as a personal identification number (PIN) that minimize losses due to theft, loss, or unauthorized use. Unlike cash, some gift cards can be re-issued if they are lost or stolen.
A gift card can also seem less impersonal than money. Unlike a cash gift where the giftee could choose to save the money in a bank account or apply the money to a pre-existing expense, a gift card forces the gift recipient to purchase a new item, often from a particular merchant. By purchasing a gift card redeemable only from a particular merchant (or group of merchants), the giftor can choose a specific class of goods or brand of store, thus maintaining some of the traditional gift-giving experience. Furthermore, gift cards are often adorned with colorful logos, designs, or photographs that provide a more tailored and memorable gift experience than cash, checks, or other standard financial instruments. In comparison to paper gift certificates, the tangible qualities of today's plastic gift cards (such as their durability and their similarity in size, shape, and ease-of-use to credit cards) provide additional appeal.
Current gift cards have some significant drawbacks, however. Most importantly, many of today's gift cards are never used by the gift recipient. This is often because the recipient is too busy to use the card, misplaces or forgets about the card, or cannot find an item towards which he or she wishes to apply the card. Likewise, some gift card recipients only use a portion of the value stored on a gift card. While unused gift cards are profitable to the merchants who sell them, they represent lost value to the giftor and giftee.
Another drawback of today's gift cards is that the giftor immediately loses title to the funds used to purchase a gift card, yet the giftee may not actually use the card for many months (or even years). During that time, neither the giftor nor giftee can earn interest on the money represented by the gift card. Furthermore, the giftor has no legal right to, or control over, the value represented by a conventional gift card. If a conventional gift card issuing merchant has financial difficulties, goes bankrupt, or goes out of business, the giftee may not be able to use the gift card and the giftor may be unable to obtain a refund.
Gift cards today are usually not refundable or redeemable for cash by either the giftor or the giftee, even if the gift card reaches its expiration date or otherwise goes unused. While many giftors may not want a gift card to be redeemable for cash by the giftee, those giftors often would like to recoup the purchase price of unused, lost, or expired gift cards.